Changing Landscape Calow Benefit Partners Inc

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Changing Landscape for Employee Benefits in Ontario

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  • solutions that don’t cause disruption
  • Changing Landscape Calow Benefit Partners Inc

    1. 1. AGENDA  Paramedical Landscape - Fraud/abuse  Drugs, “The Changing Landscape”  Past/Future trends  Industry – EP3  Plan Design, Action or Apathy?
    2. 2. Paramedicals  Canadian Healthcare Anti Fraud Association  CHCAA  30 plus members including  Insurance companies  Third Party Administrators  Ontario Provincial Police  Meet Monthly  Review/share/update tips, hot spots  Paramedical Practitioners, Doctors, Dentists Pharmacists and “Hospitals” -Watch list
    3. 3. Paramedicals  One of theTop Canadian Carriers in 2012  Medical consultants reviewed in excess of $1 Million of claims  Recovered well above targeted goals in savings and recoveries  Representing a 20% increase in fraud activity year over year  Eg. 18 employee firm had $26,000 in para claims  Practitioners accessing web forms and policy info via internet  CHCAA also deals with IdentityTheft for Practitioners
    4. 4. Paramedicals  Most activity recent years  Medical braces-multiple physical locations per patient (Knee/elbow/wrist etc…)  Use of non three dimensional orthotics castings and multi family claims  Uncertified Canadian Orthotic clinics  Surgical stockings  Multi tier practitioner clinics (Physio, Chiro, Massage…etc)  Spa clinics using practitioner’s registration
    5. 5. Paramedicals  CHCAA process  Monitor claims for activity separate from the norm and random audits  Forensic test on claims submitted  Request practitioner’s medical notes after interviewing patient in person  Due diligence prepare report and inform authorities and plan sponsors  Employees can be charged if collusion exists
    6. 6. Paramedicals  What to do?...Educate Employees  If it is “FREE” something is not right with service  Protect health card at all times  Keep benefits card for yourself/family  Confirm receipt matches treatment  Be vigil, request info from broker/insurance carrier quarterly  Keep copies of all forms submitted  Employees should “NEVER” sign blank claim forms!
    7. 7. Paramedicals  Plan Design Considerations  On-going meetings / education  Reduce overall coverage $500 to $300  Cap at $500 for all practitioners  Work closely with carrier on abuse/fraud  Eliminate Paramedical coverage and replace with Healthcare Spending Account (HCSP)  Problem- treated like a credit card not for intention of employee’s health
    8. 8. Drugs “Changing Landscape”  Rx & D:  Canada’s Research-Based Pharmaceutical Companies  50 member firms  Priority Issues:  Driving new Medicines  Demonstrating Value  Ensuring Product Safety  Regulated industry  Patented Medicines Price Review Board established 1987  Only 40% of drugs internationally hit Canadian market
    9. 9. New Drug Discovery & Development 8 – 10 years Drug discovery Preclinical Clinical trials Regulatory review Scale-up to manufacturing Market exclusivity One approved drug 0.5–2 years6–7 years3–6 years Number of volunteers Phase 1 Phase 2 Phase 3 5250~ 5,000 – 10,000 compounds Pre-discovery 20–100 100–500 1,000–5,000 Clinicalinvestigation Regulatorysubmission High-risk research: more than $1 billion over 10–15 years Market exclusivity following approval: 8-10 years Adapted from: Drug Discovery and Development: Understanding the R&D Process, www.innovation.org; DiMasi et al. Managerial and Decision Economics 2007; 28:469-79.
    10. 10. Chemical Compound is like… A Biologic Compound is like…
    11. 11. Two Main types of MedicationsChemical Compounds  “Simple or small molecules  Often taken orally as pills (although not always)  Manufacturing process is simple to replicate  Post-patent entities called ”generics”  Health Canada assessment & approval of generics is abbreviated – compares to original brand product  Approved generics are formally approved as “bioequivalent” and interchangeable Biologic Compounds  Complex or large molecules  Living tissue – human, animal, plant  Must be injected or infused  Insulin and vaccines are familiar forms of biologics  Post-patent entities called “Subsequent Entry Biologics” SEB’s or ‘Biosimilars’  Manufacturing process is highly precise, difficult to replicate  Health Canada assessment & approval of SEBs is a stand-alone product  SEBs are NOT “ bioequivalent’– not interchangeable
    12. 12. Value of Incremental Innovation 12 1990 2013
    13. 13. 13 Incremental Innovation: better quality of life 1970: the first insulin pump modern-day insulin pump
    14. 14. 14 Incremental Innovation: Better Outcomes 1996: complex regimens with high pill counts 2006: one pill once daily Drug Information Association HIV
    15. 15. Specialty Drugs 1.0% Traditional Drugs 99.0% %of Claims 15 Stakeholder challenges  Specialty drug spend continues to increase and anticipated to grow to 35% by 2015 Source: Express Scripts Canada
    16. 16. Top 10 Therapy Classes by Spend (Inflammatory Conditions Overtakes High Blood Pressure)
    17. 17. 17 To Ten Medicines Rank 2009 2010 2011 2012 1 REMICADE REMICADE REMICADE REMICADE 2 NEXIUM 40MG SR NEXIUM 40MG SR CRESTOR 10MG HUMIRA 3 LIPITOR 20MG CRESTOR 10mg NEXIUM 40MG SR TAB ENBREL 4 LIPITOR 10MG ENBREL HUMIRA ESOMEPRAZOLE 40MG ER 5 CRESTOR 10MG HUMIRA ENBREL NEXIUM 40MG SR 6 ENBREL LIPITOR 20MG CRESTOR 20MG CRESTOR 10MG 7 HUMIRA LIPITOR 10MG CYMBALTA 60MG DR CIPRALEX 10MG 8 LIPITOR 40MG CRESTOR 20MG TAB SYMBICORT 200 TURBUHALER CYMBALTA 60MG 9 PREVACID 30MG PLAVIX 75MG CIPRALEX 10MG SYMBICORT 200 TURBUHALER 10 PLAVIX 75MG SYMBICORT 200 TURBUHALER PLAVIX 75MG EZETROL 10MGSource: Manulife Financial national claims data
    18. 18. 18 Specialty drugs  Specialty drug cost pressures will continue  Research and development is focused on1 :  Orphan drugs - 43% of specialty pipeline  Cancer  Inflammatory disease  Represents lifelong spend Source: 1) Express Scripts research, AMCP Conference April 2013
    19. 19. Specialty Medication  Eg. Solaris Medication  Rare blood disorder  Manufacturer is in United States  Authorized via Health Canada and PMPRB  AnnualTreatment Spend  Approx. $600,000 per year  Roughly 70 Canadians require Solaris currently  One major carrier has four certificates  Industry responds……EP3
    20. 20. Industry EP3 Statement  Reinsurance for carriers over the long term  On going claims in excess of $25,000 annually  Reimbursed back to carrier each year  Insured plans only, ASO and RefundAccounting programs excluded  Plan Sponsor protected for market study  EP3 statement included in annual renewal  Forms part of specs for RFP from carriers  Carriers compete on first $25,000 of claims for pricing
    21. 21. 22 Opportunity Traditional/Specialty  Don’t lose sight of the almost 80% of current spend  Drug reforms have given employers the time to plan  It’s time to take advantage of savings opportunities  Chronic disease spend will continue to play an important role
    22. 22. Action or Apathy  Action  Recent Patent Cliff  Lipitor, Crestor, Plavix etc…  Bill C102 for Ontario Drug Benefit Program ODB  Generic Pricing is 25% of Brand for Ontario  Opportunity exists for savings on traditional meds  Apathy  Do nothing……..$$$$$$
    23. 23. Traditional Spend “Action”  Our approach….proactive!
    24. 24. Action  Top fifty drug report  Identify “Illness category” –Wellness  Identify Brand where Generic is available  Identify Brand coming off patent in next few years  Plan Design Considerations  OfferTwoTier drug plan  Eg. 80% coinsurance for Brand and 100% Generic  Company spend is decreased 75%  Employee driven- win win
    25. 25. Action  Opportunity for savings  Patent Cliff  Coming to an end for traditional drugs  Future is much different  Specialty Drugs  SEB’s
    26. 26. Crester O xycontin Eprex Neulasta
    27. 27. Thank You : Q&A

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